Why and when was the Certificate of Need (CON) created?
Certificate of Need (CON) programs are used today by 37 states to help maintain quality of care and control health care costs of communities. CON requires that health care facilities like hospitals or nursing homes seeking to expand current services or add new services submit applications to the state. Approval must be obtained before initiating projects that require capital expenditures above certain dollar amounts.
The U.S. Congress enacted a law providing incentives for states to create "certificate of need laws" in 1974 and most states established such laws during the 1970's. The federal law was dropped in 1989 and it has since been left up to the states to decide how and what to regulate in this area.
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—The Fact Monster